Spending plans by Ontario’s Ministry of Education fall $12.3 billion short of keeping up with expenses over the next eight years, the province’s financial accountability office says.
The “spending gap” means the ministry will have to either provide more money than forecast in its recent budget or cut spending, the report by the budget watchdog says.
The report comes as the ministry faces the task of helping two million elementary and secondary students in Ontario recover from two school years that have been disrupted by the COVID-19 pandemic.
Students have shifted back and forth from remote learning at home and in-person school since March 2020. About one-quarter of Ontario students chose to study online at home this year.
Pediatricians and other experts have also warned of a mental health crisis among children who have been isolated from friends and prevented from participating in their usual school routines and activities. The most vulnerable kids were hit hardest. Some rely on school for food and social supports.
The FAO analysis says the Ontario budget calls for spending less on education than it estimates would be required to maintain current programs.
The government forecasts education spending to increase by an average of 1.2 per cent a year from 2019-20 to 2029-30. The ministry’s programs and commitments require a spending an average of two per cent more a year, the report says.
“This results in annual spending gaps that are expected to reach $2.9 billion by 2029-30,” the FAO said. The cumulative spending gap will reach $12.3 billion in that time period.
Education Minister Stephen Lecce, responding Tuesday in the legislature to a question about the report, questioned the methodology used by the FAO.
The report assumes salary increases for education staff of two per cent a year after contracts expire in 2022, “in line with historical wage growth for education sector workers and projected inflation.”
The government does not share that wage increase assumption, Lecce said.
For now, raises for the province’s 280,000 teachers and educators are capped at one per cent a year under provincial wage-restraint legislation the government imposed on the public service.
The education ministry budget forecasts “only reflects the current collective agreements,” which is a key difference with the FAO forecasts, a ministry spokesperson said. The current collective agreements have wage increases of one per cent.
Salaries are the major expense at school boards, accounting for about 82 per cent of operating expenses.
Enrolment is another major cost factor because the majority of school board funding is based on the number of students.
The FAO estimated that enrolment will increase by 0.6 per cent a year
NDP education critic Marit Stiles criticized the government on Tuesday, saying it should be investing more in education, not less.
Lecce replied that the government was investing $1.6 billion next year for COVID-19 safety in schools. He said his ministry had increased grants for student needs given to school boards, which went up by $561 million this year, is allotting $85 million for summer school and to provide reading and math supports for learning gaps and has quadrupled mental health funding.
“How could the member opposite suggest there is a reduction in expenditure?”
The FAO report says that, while education funding is projected to increase, it’s not enough to cover inflation, salary and enrolment increases. The shortfall means the government “will need to increase funding to the education sector or introduce new spending restraint measures,” the report says.
The Education Ministry plans to spend $33 billion in 2021-22, the second largest government expenditure after the health ministry.
Some of the other findings in the report:
• Child care: In the 2019 budget, the ministry promised to create up to 30,000 new child-care spaces in schools by 2023-24. So far, 20,807 spaces have been approved or constructed. Allowing time for construction, the FAO projects that all the spaces won’t be in schools until 2026-27.
The ministry says the report used an average timeline of of three to five years from approval to construction of the spaces, but timelines vary and some smaller projects ones can be completed in a year.
• COVID-19 funding: The Education Ministry’s plan calls for $4.8 billion in time-limited, COVID-19-related spending between 2019-20 and 2022-23, the report found. That includes $2.3 billion for school boards to cover expenses such as more technology and staff and $1.8 billion sent directly to parents of school-aged children in one-off payments.
The province announced in May that more than $1.6 billion for COVID-19 funding would be made available next school year.
• Here’s how the FAO broke down that $1.6 billion: an estimated $623 million is from the Ministry of Education for the time period from 2021 to 2023. Up to $536 million of that total is for PPE and school nurses that will be funded by other ministries. The FAO excluded $478 million from the $1.6 billion total because that money has not been committed.
It will be spent in the second half of the school year if necessary, depending on the status of the pandemic.